The global financial crisis and its effects on the international monetary funds

ABSTRACT This paper aims to analyze the innovations introduced in the functions of the International Monetary Fund in the context of the 2008 economic and financial crisis. This promoted an action that aimed to strengthen the surveillance function through the adoption of the Integrated Surveillance. Thus, alongside the traditional conditionality based on an a posteriori implementation of adequate economic policies, a criterion of ex ante conditionality in the precautionary branches was also introduced or based on the economic characteristics of the country to be financed. Concerning traditional conditionality, it will be asked whether the IMF has adopted a less extensive approach than its role.

The road to the 1980s write-downs of sovereign debt

The Latin American debt crisis consumed the 1980s and was not restricted to Latin America. Starting from the August 1982 Mexican weekend, the crisis had three phases: Concerted Lending (1982-5), Baker Plan (1985-9) and Brady Plan (1989 to mid 1990s). This article describes the evolution of the debt strategy and the road to embracing debt write-downs at the end of the decade. In the absence of an external coordinating mechanism, four groups of parties had to reach agreement on any change in the strategy: the borrowing countries, their commercial bank lenders, the home-country authorities of those lenders, and the International Monetary Fund as the principal international institution. Each group could effectively veto any change in the strategy. This need for consensus is lesson number one from the 1980s for today. Lesson number two is that political economy aspects dictated that the strategy be implemented on a case-by-case basis. The article concludes with an application of these lessons to a similar, but even more global, potential debt crisis in the wake of the COVID pandemic.

The International Monetary Fund’s intervention in education systems and its impact on children’s chances of completing school

Enabling children to acquire an education is one of the most effective means to reduce inequality, poverty, and ill-health globally. While in normal times a government controls its educational policies, during times of macroeconomic instability, that control may shift to supporting international organizations, such as the International Monetary Fund (IMF). While much research has focused on which sectors has been affected by IMF policies, scholars have devoted little attention to the policy content of IMF interventions affecting the education sector and children’s education outcomes: denoted IMF-education policies. This article evaluates the extent which IMF-education policies exist in all programs and how these policies and IMF programs affect children’s likelihood of completing schools. While IMF-education policies have a small adverse effect yet statistically insignificant on children’s probability of completing school, these policies moderate effect heterogeneity for IMF programs. The effect of IMF programs (joint set of policies) adversely effect children’s chances of completing school by six percentage points. By analyzing how IMF-education policies but also how IMF programs affect the education sector in low- and middle-income countries, scholars will gain a deeper understanding of how such policies will likely affect downstream outcomes.

The case for private administration of deposit guarantee schemes

We make the case that the responsibility for appointing board members in Deposit Guarantee Schemes (DGS) for commercial banks should be entrusted to the industry. In doing so, we challenge the position adopted by the International Monetary Fund, which has proposed public DGSs as the best practice. We lay out the comparative advantages of private over public DGS administration, and contend that the role of the government should in principle be limited to regulating DGSs specifically and financial markets in general. We conclude that the current worldwide trend towards greater involvement of government in financial regulation should not be extended to the administration of DGSs.

Bezpieczeństwo ekonomiczne Republiki Białoruś w dobie kryzysu polityczno-gospodarczego lat 2020-połowa 2021

Republic of Belarus begins the third decade of the 21st century with numerous problems, which include the unstable socio-political situation, broken dialogue and relations with the international environment, and Western sanctions. All these factors have caused a lot of turbulence in the Belarusian economy. This article is an attempt to examine the economic security of Belarus in the period of the depletion of the current economic model, the reduction of Russian energy subsidies, the Covid-19 pandemic and the political crisis resulting from the rigged presidential elections in August 2020. Data from the Belarusian Bielstat database, the National Bank of the Republic of Belarus, the World Bank, the International Monetary Fund, and rating agencies will be used as source materials.

Investigating the role of the International Monetary Fund in the process of resolving financial crises: case study of Greece

The economic crisis in the United States and its spread to continental Europe caused a financial crisis in European stock markets, which in turn reduced production in Europe, resulting in rising unemployment, that eventually led to protests against the current economic situation. These political unrests have prompted international and regional governments and financial institutions such as the International Monetary Fund, the World Bank and the European Central Bank to find a way to end this severe financial crisis. Greece, as one of the EU member states that has been affected by this global crisis, has made efforts to improve its economic situation. The main question of this study is to what extent the International Monetary Fund was able to help resolve the financial crisis in Greece? The hypothesis is that due to the conditionality of financial aid from the International Monetary Fund to Greece in crisis and Greeces lack of attention to the full implementation of austerity programs, such financial aid has not been able to save the Greece economy from financial crisis. One of the aims of this study is to what extent developing countries can rely on IMF recommendations to overcome the financial crisis. The aim of the research is to find out why International Monetary Fund could not adopt proper monetary and financial policy to settle the financial crisis in Greece. Moreover, the reasons behind failed attempts of Greeces policymakers to implement IMFs austerity measures in their country are sought.

The Waltz's Third Level of Analysis and China's Pursuit of Legitimacy Via the AIIB

Since 2016, the Asian Infrastructure and Investment Bank (AIIB) has assisted countries in improving their economic conditions with infrastructure and transport projects. Publicly proposed in 2013 by China's President, Xi Jinping, during his state visit to Indonesia, the AIIB has helped consolidate China's legitimacy as a leading power in Asia and globally. Thus, this paper argues that forming the AIIB was a move to counter the relatively low vote share in the neoliberal's international financial institutions, namely the World Bank, the International Monetary Fund (IMF), and the Japan-led Asian Development Bank (ADB). With the added benefit of leading a development institution, more legitimacy is gained via the international system. Since its establishment, AIIB had significantly increased from 57 founding members in 2016 to 103 in 2020. In examining how this translates into China gaining legitimacy from the international system, this paper examined the case of China's AIIB through the Third Level of Analysis in Kenneth Waltz's Neorealism. In his The State, And War, Waltz argued for the "Levels of Analysis" and convinced the third level analyses a state's legitimacy and goals via the international system's responses and interactions. This paper examined the relationship between China's standing in the eyes of the world and the acceptance of AIIB as a legitimate development institution.

Comparison of Gross Domestic Product Forecasts before and after the Covid-19

The International Monetary Fund (IMF) and the World Bank (WB) publish annual reports on the world economic outlook. This study compared the Gross Domestic Product (GDP) of different countries by these 2 institutions, before and after the Covid-19 pandemic. The countries were selected from the 6 regions of Africa, the Americas, the Eastern Mediterranean, Europe, Southeast Asia, and the Western Ocean. In order to be able to compare these countries, WB reports were selected as a model and then the corresponding economic data were extracted from the IMF.

Poverty, Inequality, and the International Monetary Fund: How Austerity Hurts the Poor and Widens Inequality

Among the drivers of socio-economic development, this article focuses on an important yet insufficiently understood international-level determinant: the spread of austerity policies to the developing world by the International Monetary Fund (IMF). In offering loans to developing countries in exchange for policy reforms, the IMF typically sets the fiscal parameters within which development occurs. Using an original dataset of IMF-mandated austerity targets, we examine how policy reforms prescribed in IMF programs affect inequality and poverty. Our empirical analyses span a panel of up to 79 countries for the period 2002–2018. Using instrumentation techniques, we control for the possibility that these relationships are driven by the IMF imposing harsher austerity measures precisely in countries with more problematic economies. Our findings show that stricter austerity is associated with greater income inequality for up to two years, and that this effect is driven by concentrating income to the top 10% of earners while all other deciles lose out. We also find that stricter austerity is associated with higher poverty headcounts and poverty gaps. Taken together, our findings suggest that the IMF neglects the multiple ways its own policy advice contributed to social inequity in the developing world.